Italian scrap prices begin to increase

Italian scrap prices are beginning to increase this month but quiet activity persists and not all mills are in a buying mood.

Faced with requests for month-on-month increases of €30/tonne ($32), mills are taking their time to decide and putting off agreeing on large-volumes contracts. Some, however, have started to grant €15/t hikes on average, sources tell Kallanish.

One mill is yet to resume production after the holidays, while most producers are using up their scrap stocks. Towards the middle or end of this week, some high-volume contracts will be signed, giving the market a clearer direction.

Very few deals have been signed at increases exceeding €30/t or, in general, for the noblest grades of new arisings E8. According to the first indications from the few contracts agreed, domestic E8 mixed grade is sold at €360-380/t delivered and at €390-420/t for the very high grade. Old thick scrap E3 is pegged at €350-370/t delivered depending on quality. E40 mixed grade is hovering at €360/t, while E1 is being transacted at €340-350/t delivered, depending on quality.

Local steel trade association Assofermet reports issues with the local road transport sector, both in terms of availability of trucks and higher costs, which will impact the Italian scrap market this year. The increase in fuel prices could also play an important role in the stability of the supply chain in the coming months, the association says in its latest market note.

Italian steel and scrap companies are now dealing with a market fuelled by high hopes of a restart after the long Christmas holiday break, while the expensive energy issue seems to have partially returned. December was a month of “stability and cautious optimism” but mills’ demand is forecast to remain sustained, with prices being negotiated this week.

Natalia Capra France